Microsoft unveils intellectual property policy to expand access

Microsoft says its latest licensing policy signals its commitment to working with other suppliers in the industry on intellectual...

Microsoft says its latest licensing policy signals its commitment to working with other suppliers in the industry on intellectual property swaps intended to drive interoperability and innovation.

Microsoft will create licensing programs to offer access to a broad range of its intellectual property, including copyrights, trademarks, file formats and schema, software technology, and Microsoft-developed standards specifications.

Microsoft also introduced programs offering technology and patent licences for two of its creations, its ClearType technology for improving the readability of text on LCDs and its File Allocation Table (FAT) file system storage format.

Some of Microsoft's licensing programs will be royalty free, like the Office XML (Extensible Markup Language) schemas it began offering developers last month. Others, like its new ClearType and FAT programs, will carry fees. Details of the various programs are listed on a new Microsoft IP website, http://www.microsoft.com/mscorp/ip/.

Licensing Microsoft's FAT technology will cost companies 25 cents per unit incorporating the system, such as memory cards and digital cameras. Fees are capped at $250,000 per manufacturer.

The ClearType program will let vendors use the technology in devices such as handheld computers and mobile phones, with fees generally in the range of $1 to $3 per device.

Microsoft's new licensing approach is unrelated to its antitrust settlement agreement with the US Department of Justice and its skirmish over the same issue with the European Commission, according to Brad Smith, the company's general counsel and senior vice president.

"We felt it was important to take this step based on our strong dialogues with a number of other companies in our industry," Smith said.

Analyst Joe Wilcox, of Jupiter Research, called the new licensing policy an "important first step" for Microsoft as the industry's most notorious proponent of proprietary technology edges toward a more open approach to product development.

"Traditionally Microsoft has been very guarded about its IP. Its approach has been to try to differentiate itself from others with its IP," he said. "I think what you're really seeing here as much as anything is evidence of the changes going on within Microsoft."

Anything in Microsoft's portfolio is potentially available for licensing.

"Access to and exchange of intellectual property is really essential to the continued growth and development of the broader IT industry," said Smith. "Microsoft is committed to licensing its intellectual property on clear, commercially reasonable terms based on industry norms."

However, executives were guarded about how extensively the company would consider expanding its Windows and Office-related licensing.

"We're aware of the application programming interface issue," said Microsoft director of business strategy for IP David Kaefer, referring to the interfaces software programs use for connecting with other applications and services.

"We'd like to improve information about the APIs that are already available, and then we need to see what people say. Clearly, to the extent that people are still asking questions about them, there's interest."

Microsoft has been working for nearly a year on developing a clearer IP policy.

Microsoft expects most licensing arrangements to be made one-on-one with interested companies. Formal programs such as the ClearType and FAT system arrangements will be relatively rare, Kaefer said.

While Microsoft will charge for some of its licensing arrangements, the company does not expect the new programs to generate significant revenue.

Stacy Cowley writes for IDG News Service

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